AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Merger Agreement") made and entered
into as of January 28, 2004 of the by and between Global Digital
Solutions, Inc., a Delaware corporation ("GDS") and Creative Beauty
Supply, Inc., a New Jersey corporation ("CBS").
WITNESSETH:
WHEREAS, GDS is a corporation duly organized and existing under the
laws of the state of Delaware;
WHEREAS, CBS is a corporation duly organized and existing under the
laws of the state of New Jersey;
WHEREAS, on the date of this Merger Agreement, GDS has the authority to
issue 100,000,000 shares of common stock, $.00001 par value per share,
of which up to 23,861,000 shares are validly issued and outstanding,
fully paid and non-assessable;
WHEREAS, on the date of this Merger Agreement, CBS has authority to
issue 100,000,000 shares of Common Stock, $.001 par value (the "CBS
Common Stock"), of which 3,494,650 common shares are issued and
outstanding. CBS has authority to issue 10,000,000 shares of
Preferred Stock, $.001 par value (the CBS Preferred Stock"), of which
no preferred shares are issued and outstanding;
WHEREAS, the respective Boards of Directors of GDS and CBS have
determined that it is advisable and to the advantage of said two
corporations that GDS merge into CBS (hereinafter also referred to as
the "Surviving Corporation" upon the terms and conditions herein
provided; and
WHEREAS, the respective Boards of Directors of GDS and CBS have
approved this Merger Agreement and the Boards of Directors of GDS and
CBS have directed that this Merger Agreement be submitted to a vote of
their shareholders, if required by state law.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, GDS and CBS hereby agree to merge as follows:
(1) Name Change. The name of the Surviving Corporation shall be
amended to be Global Digital Solutions, Inc.
(2) Mechanics for Closing Merger. Prior to Closing, each party
shall execute and deliver, or cause to be executed and delivered to
Xxxx X. Xxxxxx, Attorney At Law as escrow agent, all monies, common
stock, documents and instruments, in form and substance satisfactory as
reasonably required to carry out or evidence the terms of this
Agreement.
Upon the approval of the respective shareholders, the executed Articles
of Merger shall be filed with the Delaware Secretary of State and the
New Jersey Secretary of State.
(3) Further Assurances. At or after Closing, GDS, at the request of
CBS, shall promptly execute and deliver, or cause to be executed and
delivered, to CBS all such documents and instruments, in form and
substance satisfactory to CBS, as CBS reasonably may request in order
to carry out or evidence the terms of this Agreement.
(4) Reverse stock split restriction. Subsequent to the change of
control, the new Board of Directors of the Surviving Corporation shall
agree not to effectuate a reverse stock split for a period of five
years from the date of Closing.
Stock and Warrants of GDS. On and after the Effective Date, all of
the outstanding certificates that prior to that time represented shares
of GDS shall be recalled and canceled and up to 23,861,000 CBS Common
Shares shall be issued in proportion to their ownership percentage.
The registered owner on the books and records of GDS or its transfer
agents of any outstanding certificate shall, until such certificate
shall have been surrendered for transfer or otherwise accounted for to
CBS or its transfer agents, have and be entitled to exercise any voting
and other rights with respect to and to receive any dividend and other
distributions upon the shares of CBS Common Stock evidenced by such
outstanding certificate as above provided.
The warrant holders in Global shall agree to exchange such Warrants and
rights attached thereto for warrants of comparable value in Creative.
There are currently Series A Warrants to purchase 2,100,000 common
shares at an exercise price of $.50 per common share and Series B
Warrants to purchase 370,000 common shares at an exercise price of
$1.00 per common share.
(6) Lockup Agreement. Xxxxxxxx and Xxxxxxx Catizones (the
"Catizones") shall have entered into a "Lockup Agreement" whereby an
aggregate of 1,000,000 common shares of CBS currently owned by the
Catizones shall be restricted for an additional one year period from
the date of Closing.
(7) Resignation of Officers and Directors. Each of the current
officers and directors of CBS shall have delivered to GDS written
resignations effective as of the effective date of the Merger (the
"Effective Date").
(8) Book Entries. As of the Effective Date, entries shall be made
upon the books of CBS in accordance with the following.
(a) The assets and liabilities of GDS shall be recorded at the
amounts at which they were carried on the books of GDS immediately
prior to the Effective Date.
(b) There shall be credited to the common stock account of CBS the
aggregate amount of the total paid-in capital of all shares of CBS
Common Stock resulting from the conversion of the outstanding GDS
Common Stock pursuant to the merger.
(c) There shall be credited to the retained earnings account of CBS
the aggregate of the amount carried in the retained earnings account of
GDS immediately prior to the Effective Date.
(9) Access to Documentation. Prior to the merger, CBS and GDS shall
provide each other full access to their books and records, and shall
furnish financial and operating data and such other information with
respect to their business and assets as may reasonably be requested
from time to time. If the proposed transaction is not consummated, all
parties shall keep confidential any information (unless ascertainable
from public filings or published information) obtained concerning each
others operations, assets and business.
(10) Abandonment. At any time before the Effective Date, the
Agreement and Plan of Merger and the Articles of Merger may be
terminated and the Merger may be abandoned by the Board of Directors of
either CBS or GDS or both, notwithstanding approval of the Merger
Agreement by the shareholders of CBS or the shareholders of GDS or
both.
(11) Counterparts. In order to facilitate the filing and recording
of this Merger Agreement the same may be executed in any number of
counterparts, each of which shall be deemed to be an original.
IN WITNESS WHEREOF, this Merger Agreement, having first been duly
approved by resolution of the Boards of Directors of GDS and CBS, is
hereby executed on behalf of each of said two corporations by their
respective officers thereunto duly authorized.
Global Digital Solutions, Inc.
A Delaware corporation
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Xxxxxx X. Xxxxxxxxxx, President
Creative Beauty Supply, Inc.
A New Jersey corporation
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Xxxxxxx Xxxxxxxx, President
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